By the Division of Banks

Applicability Of The Commonwealth's Electronic Funds Transfer Systems Act To Federal Credit Unions

It is the position of the Division of Banks that Mass. Gen. Laws chapter 167B, the Commonwealth's Electronic Funds Transfer Act, is a registration and consumer protection statute, and thus, the statute is a valid exercise of the Commonwealth's police powers designed to protect the public health, safety and welfare notwithstanding the alleged pre-emptive effect of federal law and regulation. The National Credit Union Administration ("NCUA") issued a letter on June 6, 1997 stating that the NCUA has no objection to certain requirements of the Commonwealth's ATM law. The Division of Banks views its role concerning federally-chartered credit unions as consistent with the NCUA's letter. As a matter of law, the Division lacks the authority to invalidate any duly enacted state statute on constitutional grounds such as federal pre-emption under the Supremacy Clause of the U.S. Constitution. Furthermore, as a public and regulatory policy, the Division would seek to initiate affirmative litigation through the Massachusetts Attorney General's Office against any federally-chartered credit union that willfully fails to comply with the registration, consumer protection and assessment provisions of Mass. Gen. Laws chapter 167B. It should also be noted that the Board of Governors of the Federal Reserve System has specifically determined that the consumer protection provisions of G.L. c. 167B are not preempted by 15 USC 1693 et seq., the federal Electronic Funds Transfer Act, or Regulation E, 12 CFR Part 205. ( See Reg. E, Doc. No. R-0465, (September 20, 1983)).